Top Ten Trends in Global Compliance

Transcripción

1 Top Ten Trends in Global Compliance Rafael Jiménez-Gusi/Sunny Mann Barcelona, 3 February 2012

2 1. Increasing Exposure and Risk Proliferation of laws imposing compliance obligations on companies Clear trend towards higher levels of fines (often criminal in nature) Other forms of corporate exposure also on the increase: Damages claims (shareholders, customers, competitors) Regulatory exposure Reputational and loss of customer base Importance of more proactive approach to compliance and risk management 2

3 Top 20 FCPA Settlements (millions) Siemens KBR/Halliburton BAE ENI S.p.A. Technip JGC Corporation Daimler Alcatel-Lucent Panalpina Johnson & Johnson ABB Pride International Baker Hughes Willbros Chevron Titan Bridgestone Vetco York International Statoil $800 $579 $400 $365 $338 $219 $185 $137 $82 $70 $58 $56 $44 $32 $30 $29 $28 $26 $22 $

4 EU Top 10 Cartel Fines (millions) 896 Saint Gobain Car Glass E.ON GDF Suez Gas Gas ThyssenKrupp F. Hoffman-LaRoche AG Elevators and Escalators Vitamins Siemans AG Pilkington Gas Insulated Switchgear Car Glass Ideal Standard Sasol Ltd Bathroom Fittings Candle Waxes Air France / KLM Airfreight

5 Sanctions Measures Implemented UN EU UK 5

6 2. Increasingly Aggressive Enforcement Authorities Ever expanding number of enforcement authorities actively seeking to bring prosecutions Number of enforcement actions being brought (by both mature and nascent enforcement authorities) is on the increase Cross-border cooperation between enforcement authorities is increasing in its frequency and depth Emboldened enforcement authorities seeking to pursue more novel cases Multiplying routes to enforcement (reducing the prosecutorial burden) Ever broadening powers to investigate and gather information Importance of staying on top of latest enforcement trends and the approach and practices of authorities in hot spots 6

7 More Aggressive Enforcement US Foreign Corrupt Practice Act Actions DOJ SEC 7

8 More Aggressive Enforcement Dawn Raids by Competition Authorities in Korea Russia Poland Israel Brazil EU (Commission) NCAs 0 8

9 3. Greater Extra-Territoriality Compliance obligations are increasingly extra-territorial in nature Not just theoretical; numerous cases brought against companies and conduct located outside country of enforcement authority Gives rise to conflicts with local laws and obligations Importance of factoring in risks in numerous countries (not just US, EU, UK etc.) 9

10 4. Emerging Markets Risks Enforcement authorities in emerging markets are becoming tough on compliance Multinational corporations exposed through operations in emerging markets Willingness of enforcement authorities in emerging markets to cooperate with authorities in mature markets Importance of ensuring compliance on the ground in emerging markets 10

11 TI Corruption Perceptions Index 2011 [2011 Transparency International Indices map?] 11

12 5. Personal Liability for Individuals Imprisonment is a very real risk for those directly involved in compliance violations (including directors and managers who turn a blind eye) Risk of extradition has become a reality Personal exposure may also take the form of financial penalties Directors and officers also at risk of disqualification Results in an increasingly complex background to any compliance investigation Importance of factoring in the personal risks into corporate investigations 12

13 6. Greater Strict Liability Increasing number of strict liability offences E.g. UK Bribery Act and export/sanctions violations Watering down of mens rea requirements E.g. US FCPA Importance of understanding risks of prosecution 13

14 7. M&A Risks and Successor Liability Broad interpretation by enforcement authorities of principles of successor liability Liability not limited to share purchases; exposure from asset purchases also Potential for exposure through on-going non-compliance by target New risks created as a result of the acquisitions that did not exist for parent or target pre-completion Beware of compliance risks arising from JVs and financial investments Underlines importance of due diligence as part of deal process and rapid integration of compliance processes in the post-deal environment 14

15 8. Liability for Third Parties and Others Presumptive liability of parent companies for acts of subsidiaries (very difficult to rebut) Liability of companies for acts of third party business partners is also becoming an established principle Importance of third party due diligence and effective tailored systems and controls 15

16 9. Settlements and Disclosures Disclosures and leniency applications seen as a key tool by enforcement authorities Increasing pressure placed on companies to self-disclose Settlements are increasingly commonplace; perceived risks of challenging enforcement authorities Assessment of whether to disclose is complex; risks and benefits must be carefully balanced Key elements of a voluntary disclosure Ensuring global coordination in approaching the authorities Importance of prompt consideration of the benefits of a disclosure 16

17 10. Global Compliance Best Practice Risk-based compliance programme holds the key to managing the compliance squeeze Greater convergence in compliance best practice expectations (across countries and across areas of law) Reduce risks of compliance violations Deter enforcement authorities from bringing prosecutions and may provide legal defence to actions brought Mitigation and reduction of fines arising from any actions brought Gives comfort to stakeholders (Government, shareholders/investors, customers, employees and NGOs) Form part of broader Corporate Social Responsibility objectives Importance of proactive risk management through developing a compliance programme that delivers consistency with sufficient flexibility across countries and areas of laws 17

18 Top Ten Trends in Global Compliance Rafael Jiménez-Gusi (Partner) Sunny Mann (Partner)

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20 Control de las Exportaciones y Sanciones de la UE Valeria Enrich / James Robinson Barcelona, 3 Febrero 2012

21 Preguntas Básicas Cuáles son los productos? ( Productos sujetos a control?) Para qué están destinados? ( Uso sensible?) A dónde van destinados? ( País sujeto a embargo?) A quién van destinados? ( Destinatario final sensible?) 2012 Baker & McKenzie 21

22 La importancia del Cumplimiento Interno Los riesgos de hacerlo mal son muy elevados Condenas de prisión Por ej., de hasta 5 años en España, 10 años en GB y 20 en EEUU Sanciones importantes Denegación de ciertos privilegios a la exportación Inclusión en lista de personas designadas (por ej., por asociación con el terrorismo o proliferadores de armas de destrucción masiva) Comiso de los productos Autorizaciones nulas Daño reputacional y problemas con la RSC Mayores actuaciones por parte de las autoridades 2012 Baker & McKenzie 22

23 Control de las Exportaciones de la UE 2012 Baker & McKenzie 23

24 Normativa sobre Control de las Exportaciones Internacional UE Nacional 2012 Baker & McKenzie 24

25 Régimen Europeo de Control de las Exportaciones Reglamento 428/2009 (versión modificada) de aplicación directa en todos los 27 Estados miembros Régimen común para toda la UE (incluyendo un listado común de productos de doble uso) Material de Defensa - Regímenes nacionales independientes Implementación nacional en cada Estado miembro, en particular, para la concesión de autorizaciones y control de su cumplimiento 2012 Baker & McKenzie 25

26 Listado de Productos de Doble Uso Anexo 1 del Reglamento europeo (más de 200 páginas de especificaciones técnicas) bienes, software y tecnología Categoría 0 Materiales, instalaciones y equipos nucleares Categoría 1 Materiales especiales y equipos conexos Categoría 2 Tratamiento de los materiales Categoría 3 Electrónica Categoría 4 Ordenadores Categoría 5 Telecomunicaciones y seguridad de la información Categoría 6 Sensores y láseres Categoría 7 Navegación y aviónica Categoría 8 Marina Categoría 9 Aeronáutica y propulsión Actualizada periódicamente 2012 Baker & McKenzie 26

27 Exportación de Productos del Anexo I Se necesita autorización para exportar los productos del Anexo I fuera de la UE (con algunas excepciones) Se aplica a la exportación tangible de bienes, software y tecnología, y transmisiones intangibles de software o tecnología a través de medios electrónicos ( s, intranet, fax o teléfono) No se controla la re-exportación (como en EEUU) No hay reglas de exportación supuesta ( deemed export ) 2012 Baker & McKenzie 27

28 Transferencias dentro de la UE No se necesita autorización para la transferencia intracomunitaria de la mayoría de los productos del Anexo I Se necesita autorización para la transferencia de los productos más sensibles que se identifican en el Anexo IV (p.ej. ciertos explosivos, software con funciones criptoanalíticas, conjuntos de guiado para misiles) Dependiendo del país, puede que haga falta una autorización para transferencias intracomunitarias si: el destino final del producto es contribuir a un programa de armas de destrucción masiva fuera de la UE; el destino final es fuera de la UE y no se efectuará ninguna transformación o elaboración en la UE Todos los documentos comerciales y de transporte de los productos del Anexo I deben indicar claramente que están sujetos a control en caso que se exporten desde la UE 2012 Baker & McKenzie 28

29 Destino ADM / Cláusula de Salvaguardia Destino relacionado con programas de armas de destrucción masiva ( ADM ): armas químicas, biológicas o nucleares, y sistemas de misiles capaces de transportar dichas armas Cualquier producto necesita una autorización de exportación, si el exportador: tiene conocimiento, o ha sido informado por las autoridades, o tiene motivo para sospechar (control optativo) que el producto está o puede estar destinado a un uso relacionado con ADM Los controles referentes a ADM son muy complejos y se interpretan de forma muy amplia Hay una alta sensibilidad dado el clima político internacional actual 2012 Baker & McKenzie 29

30 Uso Final Militar Cualquier producto necesita una autorización de exportación si el exportador: tiene conocimiento, o ha sido informado que el producto está o puede estar destinado a un uso final militar en un país que esté sometido a un embargo de armas por parte de la UE, la OSCE o la ONU 2012 Baker & McKenzie 30

31 Corretaje productos de doble uso Autorización para servicios de corrretaje cuando el operador tenga conocimiento, tenga motivos para sospechar o sea informado por las autoridades competentes que el producto listado en el Anexo I está o puede estar destinado para usos de ADM Servicios de Corretaje se definen como la negociación o concertación de transacciones /la venta o compra de productos de doble use de un tercer país a otro tercer país Excepción cuando la única participación son servicios accesorios (transporte, servicios financieros, seguro o publicidad o promoción general) Los Estados miembros pueden extender los controles (UK lo ha hecho) 2012 Baker & McKenzie 31

32 Régimen de Autorizaciones La UE no concede autorizaciones de exportación (salvo la AGU) Los Estados miembros conceden o deniegan solicitudes de autorización de exportación (diferentes a la AGU pero tienen facultad de revocarla si tienen sospechas razonables de que el exportador no puede cumplir con la autorización o con normativa de control de las exportaciones) Se deja a los Estados miembros la aplicación, vigilancia de su cumplimiento y sanciones Las sanciones deben de ser proporcionadas, disuasivas y eficaces 2012 Baker & McKenzie 32

33 La Autorización General de la Unión ( AGU ) Administrada a nivel de la UE Cubre todos los productos del Anexo I, con ciertas excepciones Válida para toda la UE Cubre exportaciones a Australia, Canadá, Japón, Nueva Zelanda, Noruega, Suiza, Lichtenstein y EEUU Desde enero 2012, 5 nuevas autorizaciones generales: Ciertos productos de doble uso a ciertas destinos Exportación tras reparación / sustitución Exportación temporal para exposición / feria Telecomunicaciones Químicas 2012 Baker & McKenzie 33

34 Autorizaciones Nacionales Para exportaciones de cualquier otro tipo de producto: Autorización del Estado Miembro donde está establecido el exportador Exportador - La parte contratante establecida en la UE facultada para decidir la expedición del producto fuera del territorio de la UE Autorizaciones nacionales pueden ser individuales, globales o generales Autorización válida en toda la UE La autorización puede estar sujeta al cumplimiento de determinadas condiciones (p.ej. compromiso del destinatario final) 2012 Baker & McKenzie 34

35 Autorizaciones en España Tipos de autorización a la exportación: Licencia Individual Licencia Global Acuerdo Previo Autorización de Corretaje Licencias otorgadas por el Secretario General de Comercio Exterior del Ministerio de Industria, Turismo y Comercio Informe preceptivo de la JIMDDU Previa inscripción en el REOCE 2012 Baker & McKenzie 35

36 Material de Defensa Relación Material de Defensa (Anexo I del Reglamento sobre Comercio Exterior de Material de Defensa, otro Material y Productos de Doble Uso RD 2061/2008 ) Exportación de productos del Anexo I fuera de España (incluyendo a otros Estados Miembros de la UE) necesita autorización Productos militares, paramilitares y de seguridad El clave es si el producto está especialmente diseñado o modificado para uso militar Refleja la Lista Común de Equipos Militares de la UE También se requiere autorización aunque no estén dentro del Anexo I si tienen uso final militar o relacionados con ADM 2012 Baker & McKenzie 36

37 Consecuencias del incumplimiento (1) Responsabilidad Administrativa - si el valor es inferior a Sanción de hasta 350% valor de los productos Responsabilidad Penal - Delito de Contrabando si el valor es superior a : Prisión de 1 a 5 años Multa de 6 veces el valor de los productos Comiso de los productos 2012 Baker & McKenzie 37

38 Consecuencias del incumplimiento (2) Responsabilidad penal de la empresa: El delito lo ha cometido un representante legal o un administrador de hecho o de derecho de la empresa, por cuenta y provecho de la empresa; o El delito lo ha cometido una persona, sometida a la autoridad de los anteriores, y que ha podido realizar los hechos por no haberse ejercido sobre ella el debido control atendidas las concretas circunstancias del caso" Consecuencias: Multa de 4 veces el valor de los productos Prohibición de tener subvenciones, ayudas públicas, incentivos fiscales o de la SS durante plazo de 1-3 años Suspensión de exportaciones de los productos durante 6-24 meses Comiso 2012 Baker & McKenzie 38

39 EU Sanctions 2012 Baker & McKenzie 39

40 Overview EU Sanctions Policy and Scope Designated Persons Iran Syria EU Summary Consequences arising from the breach 2012 Baker & McKenzie 40

41 EU Sanctions Policy & Scope 2012 Baker & McKenzie 41

42 EU Sanctions Policy EU follows so-called smart sanctions policy Mostly follows UN multilateral regime Some unilateral regimes, either in whole (e.g. Burma and Zimbabwe) or in part (e.g. Iran) EU sanctions regulations directly applicable in all 27 EU Member States Licensing, penalties and enforcement left to Member States Sanctions apply independently of export controls 2012 Baker & McKenzie 42

43 Whom Do EU Sanctions Apply To? Any entity incorporated in an EU Member State and its EU and non-eu branches Any entity incorporated outside the EU, but only in respect of any business conducted in the EU Any directors, officers, employees, agents etc. located in the EU (irrespective of nationality) Any directors, officers, employees, agents etc. that are nationals of EU Member States (even if located outside the EU) 2012 Baker & McKenzie 43

44 Typical EU Sanctions Controls Arms embargo Additional product controls Controls on certain services Controls on transfer of funds Designated party controls 2012 Baker & McKenzie 44

45 Designated Persons 2012 Baker & McKenzie 45

46 Designated Person Controls Freeze funds and economic resources belonging to, owned, held or controlled by DPs Prohibitions on making funds or economic resources available, directly or indirectly, to or for the benefit of DPs Concepts of funds and economic resources broadly defined Knowledge defence if did not know, and had no reasonable cause to suspect Breach of contractual obligation will not give rise to liability if based on good faith implementation of sanctions Reporting obligations (additional requirements for FSAregulated companies) 2012 Baker & McKenzie 46

47 Risk of Indirect Dealings DP X Funds/Economic Resources Y DP relationship to Y could include: Shareholder (sole/majority/minority) / Subsidiary Director Contractor / Sub-contractor Spouse or other family relationship 2012 Baker & McKenzie 47

48 Designated Person Screening Clearly documented process and allocation of responsibilities Screen against information in your possession Due diligence on parents, directors and other associated third parties where transaction related to more problematic countries; risk based approach 2012 Baker & McKenzie 48

49 Iran 2012 Baker & McKenzie 49

50 Recap on Existing Controls Controls generally applicable to dealings with Iranian Persons defined broadly to include non-iranian companies that are owned or controlled directly or indirectly by Iranian parties Product controls Oil and gas sector Dual-use Internal repression Proliferation-sensitive items Arms embargo Restrictions on provision of insurance and reinsurance Funds transfer controls Restrictions on relationships between EU and Iranian banks Extensive DP list 2012 Baker & McKenzie 50

51 New EU Controls Additional product controls (not yet in force) Petrochemical sector applicable to dealings with Iranian Persons Precious metals, gold and diamonds applicable to dealings with Government/CBI controlled persons Import bans (not yet in force) Crude oil / petroleum products Petrochemical products Expansion of DP list (in force) including CBI 2012 Baker & McKenzie 51

52 Syria 2012 Baker & McKenzie 52

53 New Product Controls Controls generally applicable to dealings with Syrian Persons defined broadly (akin to Iranian Persons) Product Controls Oil and gas sector Telecoms and monitoring equipment Internal repression Power sector electricity generation Arms embargo 2012 Baker & McKenzie 53

54 Other New Restrictions Import ban crude oil and petroleum products Restriction on investment in power sector (supplementing existing restriction in respect of oil and gas sector) Restrictions on relationships between EU and Syrian banks (but no funds transfer controls) Restriction on provision of insurance and reinsurance to Government controlled persons (though not Syrian persons more broadly) Expansion of DP list, including President Assad, Rami Makhlouf, various government controlled persons and Commercial Bank of Syria 2012 Baker & McKenzie 54

55 EU Summary Charts 2012 Baker & McKenzie 55

56 Designated Party Programmes Chart Country U.N. E.U. U.S. Belarus Burma / Myanmar DR Congo Cuba Egypt Eritrea Republic of Guinea Iran Iraq Ivory Coast Lebanon Liberia Libya North Korea Somalia Sudan Syria Tunisia Zimbabwe Balkans and ICT of Yugoslavia Al-Qaida/Taliban and Terrorists 2012 Baker & McKenzie 56

57 EU Embargos/Trade Sanctions Chart Country Arms Embargo Additio nal restrictions Armenia X Azerbaijan X Belarus X Internal repression Burma (Myanmar) X I nternal repression and timber and mining equipment DR Congo X Eritrea X Republic of Guinea X I nternal repression Iran X Nuclear, dual - use, inter nal repression and oil/gas items and insurance services Iraq X Cultural property Ivory Coast X I nternal repression Lebanon X Liberia X Libya X Internal repression North Korea X Nuclear related items and luxury goods Somalia X Sudan X Syria X Oil/gas items, telecoms and information security, power sector, insurance services and internal repression Zimbabwe X Equipment for internal repression 2012 Baker & McKenzie 57

58 Breach of EU Sanctions 2012 Baker & McKenzie 58

59 Breach of EU Sanctions Breach of the prohibition to freeze funds or economic resources or the prohibition to make available funds or economic resources to DP Administrative liability: Wilful misconduct very serious infringement sanctioned with the greatest of the following: (i) 5% of the company's net equity; (ii) twice the value of the transaction or (iii) 1,500,000 Not wilful misconduct serious infringement sanctioned with the greatest of the following: (i) 1% of the company's net equity; (ii) value of the transaction plus 50% or (iii) 150, Baker & McKenzie 59

60 Control de las Exportaciones y Sanciones de la UE Valeria Enrich (Partner) Valeria.enrich@bakermckenzie.com James Robinson (Senior Associate) James.robinson@bakermckenzie.com

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62 US Export Controls and Sanctions Steven Hill Washington DC office Barcelona, 3 February 2012 Baker & McKenzie International is a Swiss Verein with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a partner means a person who is a partner, or equivalent, in such a law firm. Similarly, reference to an office means an office of any such law firm.

63 Overview U.S. Trade Controls What are the controls? Why do they exist? Who is subject to U.S. export controls? When applicable (jurisdiction)? How applicable? Penalties/enforcement Recent developments Key issue extraterritorial reach of U.S. laws: Persons (including non-u.s. persons) dealing in U.S.-origin goods, wherever located globally Controls on U.S. person activity, wherever located globally 63

64 What are the Principal US Trade Controls? Export Administration Regulations ( EAR ) Department of Commerce, Bureau of Industry and Security ( BIS ) International Traffic in Arms Regulations ( ITAR ) Department of State s Directorate of Defense Trade Controls ( DDTC ) Trade Sanctions Regulations Department of the Treasury, Office of Foreign Assets Control ( OFAC ) Nuclear Regulatory Commission ( NRC ) Regulations Department of Energy ( DOE ) Regulations 64

65 Overlapping Rules EAR DOE NRC OFAC ITAR 65

66 Extraterritorial Jurisdiction Transactions by any person anywhere in the world involving U.S.-origin/content items Transactions by U.S. Persons anywhere Certain transactions by non-u.s. persons which may draw U.S. sanctions 66

67 Issues of Concern Items (what) Destination or location (where) Parties to the transaction (who) End use (why) 67

68 U.S. Origin/Content Items Exports of any item from the U.S. Reexports of any item of U.S. origin Exports of non-u.s. manufactured items containing U.S. content in excess of de minimis levels Exports of certain non-u.s. manufactured items based directly on U.S. technology 68

69 Non-U.S. Items with U.S. Content De minimis thresholds 10% - Cuba, Iran, Sudan, Syria, North Korea 25% - all other destinations Calculation of controlled U.S. Content Rules for software and technology ITAR see-through rule for U.S. defense articles incorporated into foreign-produced item 69

70 Definition of Export Goods Physical Shipment Hand-carry Software and technology Physical or electronic shipment or transmission No sale required for an export (e.g., samples, intracompany shipments, returns/repairs) 70

71 Technology Transfers Specific information necessary for the development, production or use of a product. The information takes the form of technical data or technical assistance. Technical data blueprints, plans, diagrams, models, formulae, engineering designs, specifications, manuals and instructions software Technical assistance instruction, skills, training, working knowledge, consulting services Publicly available technology: not controlled 71

72 Deemed Exports Releases of technology/source code subject to the EAR to a foreign national in the U.S. or a third country = export/reexport to that national s home country Release - Visual inspection by foreign nationals of U.S. origin equipment and facilities - Oral exchanges of information in the U.S. or abroad - Application to situations abroad of personal knowledge or technical experience acquired in the U.S. 72

73 Deemed Exports (cont.) Foreign National = non-u.s. citizen who is neither a permanent resident (i.e., green card holder) nor a protected individual H1B visa holders are not U.S. persons Home Country last in time rule Issues arise for: , facsimile, access to U.S. servers, telephone calls, company/customer meetings, plant tours, product demonstrations 73

74 Basic Concepts Under U.S. Trade Sanctions Apply to U.S. Persons - U.S. companies and their foreign branches - U.S. citizens and permanent resident aliens ( green card holders ), wherever located or employed - Any person while in the U.S. - Does not include separately incorporated subsidiaries of U.S. companies, with the exception of U.S. trade sanctions against Cuba 74

75 Basic Concepts Under U.S. Trade Sanctions (cont.) Prohibit all forms of U.S. involvement in transactions that directly or indirectly involve a sanctioned country or a sanctioned country government Prohibit U.S. Person facilitation of transactions by non-u.s. Persons that are prohibited as to U.S. Persons Apply to U.S. Person transactions involving Specially Designated Nationals and other blocked entities 75

76 U.S. Involvement Prohibited - Approvals or directions - Facilitation - Financing, bank guarantees - Certain forms of mainframe access - Referral of orders to non-u.s. Persons - Other support (e.g., technical, supply of products, credit review, legal support) Permitted - General Corporate Governance - Legal Advice on Application of Sanctions 76

77 Reason to Know Standard Red Flags Duty to Inquire Cannot Engage in Willful Blindness, Deliberate Ignorance or Conscious Disregard 77

78 U.S. Trade Sanctions Comprehensive Sanctions Cuba Iran Sudan Syria Significant Sanctions Burma (Myanmar) North Korea Limited Sanctions (Restricted Persons) Western Balkans, Belarus, Cote d Ivoire, DR Congo, Iraq, Liberia, Libya, Zimbabwe Entity/Person-based Sanctions Specially Designated Nationals (SDNs) Terrorists Narcotics Traffickers WMD Proliferators Human rights Violators 78

79 Targets of U.S. Sanctions Initiatives Terrorism activities Narcotics trafficking WMD proliferation Human rights violations Prior violations of U.S. export controls 79

80 Penalties Export Controls and Sanctions Administrative measures Maximum civil penalty of the greater of $250,000 per violation or twice the value of the involved transaction Denial of export privileges Exclusion from practice before BIS Revocation of export or OFAC licenses Criminal penalties Fine of up to $1 million, or for an individual up to 20 years imprisonment, or both 80

81 Penalties Export Controls and Sanctions (cont.) Additional considerations Negative publicity Prohibition on selling to U.S. Government Huge attorney fees Loss of reputation Collateral penalties, e.g., anti-money laundering provision in USA PATRIOT Act 81

82 Enforcement Trends Higher penalties Increased government-to-government cooperation Focus on sanctioned countries Government inquiries Inter-agency cooperation Legislative initiatives Expectations of compliance programs 82

83 Recent Sanctions Developments: Syria Executive Order of April 29, 2011, Executive Order of May 18, 2011, and Executive Order of August 17, 2011 Blocks Government of Syria, including its agencies, instrumentalities, and controlled entities Investment prohibition Export of services prohibition Energy sector sanctions Prohibition on importation into United States of petroleum or petroleum products of Syria U.S. Persons prohibited from any transactions involving such products Designation of 5 Syrian energy companies Facilitation prohibition 83

84 Recent Sanctions Developments: Iran Iran Sanctions Act ( ISA ) Primary U.S. statute to discourage non-u.s. persons from investing in Iran s energy sector Enacted in 1996 and amended by the Comprehensive Iran Sanctions, Accountability, and Divestment Act ( CISADA ) on July 1, 2010 Refined petroleum products sanctions Investment sanctions Expanded by EO

85 Recent Sanctions Developments: Iran (cont.) ISA: Refined petroleum products Sell, lease, or provide to Iran or Government of Iran any goods, services, technology, information, or support that would directly and significantly Facilitate Iran s ability to maintain or expand its domestic production of refined petroleum products or Contribute to the enhancement of Iran s ability to import refined petroleum products Sell or provide refined petroleum products to Iran or Government of Iran wherever located Monetary thresholds: $1 million per individual contract or $5 million in the aggregate over a 12-month period 85

86 Recent Sanctions Developments: Iran (cont.) ISA: Investments Investments that enhance Iran s ability to develop petroleum resources Monetary thresholds: An investment of $20 million or more, or Any combination of investments of at least $5 million each that in the aggregate equal $20 million or more over a 12- month period 86

87 Recent Sanctions Developments: Iran (cont.) Executive Order 13590: Petroleum resources Sell, lease, or provide to Iran or Government of Iran any goods, services, technology, or support that could directly and significantly contribute to the maintenance or enhancement of Iran s ability to develop petroleum resources in Iran Monetary thresholds: $1 million per individual contract or $5 million in the aggregate over a 12-month period 87

88 Recent Sanctions Developments: Iran (cont.) Executive Order 13590: Petrochemical sanctions Sell, lease, or provide to Iran or Government of Iran any goods, services, technology, or support that could directly or significantly contribute to the maintenance or expansion of Iran s domestic production of petrochemical products Monetary thresholds: $250,00 per individual contract or $1 million in the aggregate over a 12-month period 88